Community Diversity and Donor Control: An Empirical Analysis of Contributions to Donor-Advised Funds at Community Foundations

DOI10.1177/00953997211035721
Published date01 May 2022
Date01 May 2022
Subject MatterArticles
https://doi.org/10.1177/00953997211035721
Administration & Society
2022, Vol. 54(5) 763 –791
© The Author(s) 2021
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/00953997211035721
journals.sagepub.com/home/aas
Article
Community Diversity
and Donor Control:
An Empirical Analysis
of Contributions to
Donor-Advised Funds at
Community Foundations
Heng Qu1 and Laurie E. Paarlberg2
Abstract
This study examines the relationship between community ethnic-racial
diversity and contributions to donor-advised funds (DAFs) held by
community foundations. Unlike general contributions, DAFs allow donors
to retain advisory control over their fund distribution based on individual
preferences. In contrast to prior research that generally finds that diversity
dampens private provision of public goods, we show that greater ethnic-
racial diversity is significantly associated with higher levels of contributions
to DAFs at community foundations but not with general contributions. The
findings contribute to the literature on diversity and public goods provision
and have practical implications for the policy role of private philanthropy.
Keywords
ethnic diversity, community foundations, donor-advised funds, philanthropy,
charitable contributions, public goods
1Texas A&M University, College Station, USA
2Indiana University–Purdue University Indianapolis, USA
Corresponding Author:
Heng Qu, The Bush School of Government & Public Service, Texas A&M University, 4220
TAMU, College Station, TX 77843-4220, USA.
Email: hqu@tamu.edu
1035721AAS0010.1177/00953997211035721Administration & SocietyQu and Paarlberg
research-article2021
764 Administration & Society 54(5)
Introduction
Local governance increasingly relies upon private philanthropic organiza-
tions, such as community foundations, to achieve public policy goals. In par-
ticular, community foundations, which are public charities that raise funds
and make grants in a geographic community, increasingly play important
roles in planning, implementing, and funding local public services (Carman,
2001; Daly, 2008; Graddy & Morgan, 2006; Phillips & Jung, 2016). However,
there are critiques that private philanthropy is unresponsive to the changing
needs of a diverse population and serves the elite interests of donors, who
also unduly benefit from the tax benefits associated with their contributions
(Giridharadas, 2019; Reich, 2018; Reich et al., 2016). Despite the normative
expectation that community foundations should be more responsive to the
needs of the communities in which they are embedded, concerns exist that
even community foundations are not responsive to the interests of communi-
ties of color (Paarlberg et al., 2020). As community foundations face increased
pressure to offer more control to individual donors, spurring the growth of
donor-advised funds (DAFs; Barman, 2008; Berman, 2015; Carson, 2014;
Ostrander, 2007), concerns arise that wealthy donors will increasingly direct
their giving through DAFs housed at community foundations to elite interests
rather than inclusive community needs (Semuels, 2018). These criticisms put
community foundations at the center of discussions about community philan-
thropy, diversity, and equity.
This study examines the relationship between ethnic-racial diversity and
contributions to DAFs held by community foundations. Whereas diversity is
associated with positive cultural and economic benefits (Putnam, 2007), a
growing body of research across disciplines suggests that ethnic and racial
diversity dampens not only government-funded public goods (Alesina et al.,
1999; Poterba, 1997) but also private contributions to public goods (Andreoni
et al., 2016; Miguel & Gugerty, 2005; Okten & Osili, 2004) and voluntary
participation (Alesina & La Ferrara, 2000; Rotolo & Wilson, 2012). Prior
research offers several theoretical explanations underlying this negative asso-
ciation. Individuals in more diverse communities may prefer different types
of public goods (Alesina et al., 1999) and may be less willing to contribute
resources to benefit others who are different from their own identity groups
(Vigdor, 2004). Compared with homogeneous communities, diverse commu-
nities also lack norms and strategies to encourage and enforce cooperation
across groups (Habyarimana et al., 2007).
The theoretical concepts that support a negative relationship between
diversity and private support for public goods raise the question whether it is
the same for contributions to DAFs. A DAF is a giving vehicle established at

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT